Conflict of Laws – Florey, Fall 2012
A. OVERVIEW AND GENERAL BACKGROUND
o refers to conflict of laws, also used when only choice of law is meant.
o the local state and court where the case is pending.
v Lex fori
o The law of the forum state.
2 Elements in conflicts case
v What state has jx over the parties and the subject matter?
v What is the appropriate choice of law?
v Under what circumstances is an out-of-state judgment entitled to recognition and enforcement?
o Who is bound and with respect to what issues?
o Issue preclusion
v Interstate v. International conflicts cases
o As a general rule, American conflicts law does not differentiate b/w interstate and international cases: with respect to jx, choice of law, and the recognition of judgments apply to both.
§ In jx, the international nature of a case may make litigation in an American court inappropriate.
· Forum non conveniens
§ The Full Faith and Credit Clause does NOT apply to foreign-country judgments (b/c of comity), but most states accord those judgments the same recognition as they would sister-state judgments.
· But b/c foreign-country judgments don’t merge underlying cause of action, such a judgments may also be subject to more extensive public policy review!
§ The United States has entered into a number of treaties which apply to international cases only.
· International Sales Convention
· Civil Aspects of International Child Abduction
· Service of Documents
· Taking of Evidence Abroad
· Liability in Civil Aviation (Warsaw Convention)
· Treaties in pending
o Recognition of Trusts
o Law Applicable to Decedents’ Estates
v As a general rule, conflicts law is state law.
v Federal law
o statutory or federal common law, may displace state law.
v Federal constitutional law
o It establishes the outer limits w/in which a state is free to adopt its own conflicts rules.
o Due Process Clause
o Full Faith and Credit Clause
o All the above are trumped by treaties.
4 Approaches to choice of law
o 12-13 centuries, distinguish b/w real and personal statute
§ Real statute: territorial in nature.
· i.e. rules of law dealing with land.
§ Personal statute: follows the person.
· i.e. person’s capability to contract.
o 17th century,
§ Dutch scholar Huber emphasized the territorial nature of all laws. He solved the need for international cooperation with the concept of “comity.”
§ Joseph Story, the “father” of American conflicts law, made comity the cornerstone on conflicts.
· Comity: means recognizing, giving local effect to, acts valid where done and rights acquired under another state’s law.
§ Territoriality and comity are inconsistent concepts:
· A law is at the same time limited, yet entitled to some recognition or deference beyond the territory.
o Vested right theory:
§ To solve the inconsistence b/w territoriality and comity.
§ A right validly created by the law of one state is valid (to be recognized) everywhere.
§ The First Restatement (1934) was vested-rights orientation. Joseph Beale.
B. CHOICE OF LAW
1 jx and choice of law
v jx and choice of law are separate issues!
o Having jx to hear the case does not guarantee having the forum law applied, nor the other way around.
o The contacts required for either may overlap and both may be present in the particular case.
2 Sources for the Choice-of-Law Decision
v Sources for the choice-of-law decision
o Choice-of-aw approach adopted by case law
C. Escape devices
v Subject matter recharacterized
o The choice of law will be affected by the type of case that is presented. The court must therefore identify – characterize – the subject matter of the case or issue as sounding in contract, tort, or whatever.
o Alabama Great Southern R.R. Co. v. Carroll, AL: working injury. Employment contract entered in AL, injured in MS. Ee argued it’s a contract claim, b/c at the time p was injured he was in discharge of the duties arising from employment contract with D. Court rejected this argument, holding that it’s a claim of torts. b/c the state statute operates upon the existence of employment relationship, regardless the rights of the parties under the contract.
o Levy v. Daniel’ U-Drive Auto Renting Co., CT: passenger sued driver for a car accident. Both domiciled in CT, accident occurred in MA. The car was rented from in CT. p can get recovery from the rent corporation under CT law, but cannot under MA law. Held, it’s a contractual claim, not torts, b/c the statutory requirement is incorporated into the contract. Therefore apply the law of the place of contracting, here was CT law. Although the renter’s liability was imposed by statute, this provision inserted in the contract. When the renter voluntarily entered into the contract, he must accept the condition. it’s driven by policy concern behind CT statute.
o Compare Carroll to Levy: both involve contractual relationship. both liabilities were imposed by statutes. Maybe Carroll was wrong.
o Haumschild v. Continental Cas.Co., WI: interspousal liability for tort growing out of an automobile accident. Injured in CA, both domiciled in WI. Held, it’s a case of family law, not torts. b/c the capacity to sue a spouse was interspouse community issue. Apply the law of common domicile. (policy driven)
o Folk v. York-Shipley, Inc., DE: a couple injured in a car accident occurred in PA, they domiciled in DE, sued D, a DE corporation. The wife’s consortium claim was barred under PA law but allowed in DE. p argued consortium claim was a family law issue, like Haumschild, b/c consortium claim is centered on the injury to marriage relationship, due to subsequent inability of her husband to perform his marital duties. Held, it’s a matter of tort law rather than family law. b/c Haumschild is about interspousal immunity; here is about injured caused by a third party outside the family relationship.
2 Substance or Procedure
o Choice of law only refers to substantive law of another state;
o The forum will always use its own procedural law.
o Whether the matter is procedural or substantive is a case-specific decision, determined by the nature of the problem (e.g. may relate to policy: punitive or compensatory) for which a characterization must be made. (Grant)
v Statute of Frauds:
o Characterized as substantive. (Linn)
o 2nd Rest: procedural. § 602.
v Statute of limitation
o Procedural, unless they were “built in” in the statutory claim or unless a borrowing statute imported another state’s limitation.
o Second Restatement:
v Survival of causes of action
o It is procedural issue, b/c survival is not an essential part of the cause of action itself but relates to the procedures available for the enforcement of decedents’ estates, which is a purely local proceeding. (Grant, also policy driven, dismissing p is windfall to D.)
o Majority in the US: substantive issue.
o 2nd Restatement: substantive.
v Amount of d
d in this state unless public policy forbids. But mere difference of remedy does not necessarily count for a refusal (Loucks).
o Enforcing a right of action of the law of a sister-state, which is not recognized in the forum, does not offend the forum’s public policy. (Loucks, where injured in MA, both domiciled in NY, forum in NY, p had right of action in MA law but not in NY. Held, the right of action should be recognized in NY.)
v May find PP exception from legislative history, forum’s tradition, modern trend.
o Imposing limitation on damages in wrongful death action is strongly contrary to the forum’s policy, b/c NY has a long-time position prohibiting such limitation. (Kilberg v. Northeast Airlines, NY) Concern of stability of law.
o Guest statute of the place of injury barring the lawsuit b/w two forum-residents is contrary to the public policy of the forum. b/c a similar statute was repealed by the forum legislature; the guest statute was on the way out; the state of injury had no interest in applying its law. (Owen v. Owen, SD)
5 Penal-law Exception
v The courts of no country execute the penal laws of another! Whether something is punitive or compensatory?
v Punitive damages is not penal for conflicts of law purposes. b/c the punishment of the wrongdoer is not designed as atonement for a crime; it is solace to the individual who has suffered a private wrong. (Louks)
6 The Foreign-tax Exemption
7 Proof of Foreign Law
v At common law,
o foreign law (including the law of sister-state) had to be pleaded and proved as fact; (Geller) (Walton)
o the determination of the foreign law was therefore not subject to review on appeal.
v Current position
o The court, with the assistance of the parties, is to determine foreign law (may take judicial notice), that its decision is to be treated as one on a question of law, and it is therefore subject to review. (Fed. R. Civ. Pro. §44.1, but still provides that the parties shall give notice.)
o If the action is based upon foreign law w/o proving that law, the court could either dismiss the action (Walton) or to apply the forum law (Geller).
o If none party raise the issue of foreign law, most courts will adjudicate the case under forum law, even under the forum’s conflicts rules the case would be governed by foreign law.
v Geller v. McCown, NV:
o Will with regard to immovable property, located in Canada. Held, forum law should apply. Where the court did not get judicial notice of the laws of a foreign country, such laws must be pleaded and proved the same as any other question of fact. In the absence of such pleading and proving, the court will presumably apply the forum law.
v Walton v. Arabian American Oil, 2d Cir.:
o Forum in NY, accident occurred in Saudi Arabia. Held, p should prove SD law in pleading. b/c the law of a foreign country is a question of fact that must be pleaded and proved. And p was not entitled to a new trial.